2 observations around the trend of tech layoffs: Today So Far
- Major tech companies are laying off tens of thousands of employees in the United States and beyond. A couple themes seem to keep coming up among these corporate announcements.
- Washington lawmakers are considering a wealth tax. It's not a capital gains tax, exactly, but it's in the same territory.
This post originally appeared in KUOW's Today So Far newsletter for January 20, 2023.
First it was Amazon. Then it was Microsoft. Now, it's Google. The tech layoffs keep coming.
In truth, it was also Salesforce, Meta, Twitter, Sophos, Coinbase, and a bunch of other tech companies laying off employees in recent weeks, but the above mentioned are shedding a decent share of their global workforces. Amazon is letting go of 18,000 people. Microsoft is laying off 10,000. Now Google says it will lay off 12,000 employees. That adds up to about 6% of Google employees worldwide. Employees in the United States have already been notified. Layoffs in other countries are expected to come soon. It is unclear how much this will affect Google's Seattle-area workforce. Last I checked, the company had a little more than 7,000 employees in Seattle.
Amazon is not only laying off workers, it is also moving out of some of its Seattle offices, KIRO 7 reports. Amazon's lease at the West 8th Tower in the Denny Triangle expires in April, and the company is just going to let it expire. Amazon says that a lot of its office workers are still remote and the need for the office space is not as high was it was before the pandemic sent such workers home. The company is also cutting its AmazonSmile program, which donates to charities customers choose. NPR called this a "cost-cutting effort." This speaks to a couple themes that have emerged amid a lot of these layoffs.
First, a lot of companies went on a hiring spree during the first couple pandemic years when people stuck around home more often. Now, things are easing up and these companies say they need to adjust. As Google CEO Sundar Pichai just wrote to employees, "we hired for a different economic reality than the one we face today." Amazon is going through a similar change. Within such adjustments is the fact that office work has changed. Many jobs (sure, not all jobs, but many) do not need commutes and cubicles. Unlike Starbucks, which wants workers in the office three days a week (seems like Starbucks has a goal of becoming the Seattle employer with the most disgruntled employees), Amazon appears to be more inclined to just nix office space and adapt.
Another theme is artificial intelligence. Tucked into a string of corporate jargon explaining the layoffs, CEO Pinchai includes this mention: "I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI. To fully capture it, we’ll need to make tough choices." He adds that Google is ready to pursue this AI opportunity "boldly and responsibly."
And then you have Microsoft CEO Satya Nadella, who recently said, "The next major wave of computing is being born with advances in AI" while talking about the company's job cuts. How will AI relate to the future of tech jobs, or the products these companies are cranking out? That remains to be fully realized. What is clear is that in the face of economic challenges, "AI" is a term that is getting thrown around.
KUOW's Joshua McNichols recently reported that there is a silver lining amid all these layoffs — there are a lot of tech jobs in the region.
“If you’re a tech worker, and you got laid off by a big company like a Microsoft or an Amazon, or any of the others, you’re gonna find yourself gainfully employed in less than 90 days,” Michael Schutzler with the Washington Technology Industry Association told KUOW. “That seems to be a national average now. People are turning over into into other wide open jobs in the tech sector within three months.”
Washington state lawmakers have joined a multiple-state effort to establish a "wealth tax." In our state, this is coming from Democrats Sen. Noel Frame and Rep. My-Linh Thai. Similar proposals have emerged in eight other states.
“Here in Washington state, we are going to fund our future by enacting a narrowly tailored property tax on extreme wealth derived from the ownership of stocks, bonds, and other financial assets, with the proceeds dedicated to education, housing, disability services, and tax credits for working families," Frame said.
The proposal targets financial assets over $250 million. Proponents argue it could lessen tax burdens on lower-income residents, while generating about $3 billion annually. They're calling it a "wealth tax," which is apt for anyone who is working with multi-million dollar assets. But in essence, this idea is in the same territory as a capital gains tax. This is like how Republicans made a big fuss about the estate tax years ago, and started calling it a "death tax," as if we were taxing people for dying. In truth, it's a tax for super wealthy people, and not poor dying people, but "death tax" really makes an impact. "Wealth tax" also paints a picture.
Capital gains taxes are generally placed on the sale of assets like stocks and bonds. The current proposal, however, appears to place a tax on the ownership of these assets, just like a person would be taxed for owning property. That's why Frame calls it a "narrowly tailored property tax on extreme wealth." This proposal also came up last year, but it was put on the shelf as lawmakers focused their energy on a capital gains tax, which shows that these ideas are somewhat related. Washington's capital gains tax is being challenged in court. If the wealth tax passes, you can expect the same legal response.
My Dyer prediction: If a wealth tax does pass in Washington, a fair share of our state's wealthy snowbirds will start claiming residences in other states. They'll stay for Washington's summer, then spend the rest of the year at their RV plot in Arizona, or at least they will claim they do. Though, the super wealthy will probably just write a check and be grumpy about it. Jason Mercier with the Washington Policy Center says the wealth tax proposal presents a "novel argument," but also feels that there is a risk of driving wealthier residents to move away. I know what he's saying, but all I hear is a hope that rental property will open up. Amy Radil has the full story on the wealth tax here.
The Friday Five: News you may have missed this week, and other cool stuff
- Screaming Trees cofounder Van Conner passes away at 55
- As tech companies announce layoffs, the clock is ticking for immigrant workers
- Middle housing bill begins with more support in WA Legislature than last time
- Actor Brandon Lee was killed by a prop gun, years before the 'Rust' shooting death
- Sustainable wines hitting Washington store shelves this spring
AS SEEN ON KUOW
Sylvia O'Stayformore, in a blue checkered shirt and bingo jumpsuit, reads a picture book to children. Drag Queen story hours have been targeted across the country, including in Renton last month. (Libby Denkmann / KUOW)
DID YOU KNOW?
Happy Chinese New Year! Actually, the holiday is on Sunday, Jan. 22, or I should say that it starts on Jan. 22. This lunar new year lasts for 15 days. In Seattle, the big Chinese New Year celebration will officially be on Feb. 4. The Wing Luke Museum is also having a fair for the new year on Jan. 28.
Last week, I covered the Vietnamese New Year, Tết, which is also this weekend. Unlike Tết, which is ushering in the year of the cat, the Chinese zodiac for 2023 is the year of the rabbit. Rabbits are said to be quiet, responsible, and kind. They have good reasoning skills and are apt to be scholars. Their lucky colors are black, pink, purple, blue, grey, and red.
ALSO ON OUR MINDS
President Biden told reporters Thursday that he's cooperating with investigators and he has "no regrets" about how he and his team have handled the discovery and disclosure of classified documents from his time as vice president during the Obama administration.